Finances, the couple and credit: Do they mix?

Perhaps you are planning to live together or you already are?

Either way, getting married is always a time of joy and celebration.

Why not take advantage of the organization of this union to also plan your future together?

In other words, it's time to make some important decisions. Where do you want to live? Do you want to buy or rent? Should you open a joint account? Will you need a car? All good questions?

In preparing for this article, I came across this interesting and revealing piece from Equifax. I invite you to read it in full:

"By understanding how credit scores and reports work, you will be better able to make important financial decisions.

What is a credit report?

A credit report summarizes your credit history as reported to one or both of the Canadian credit bureaus by lenders, creditors and other sources.

Among other things, potential creditors and lenders may use the information in your credit report when deciding whether to approve your application for credit and the associated interest rate.

Your credit report is linked to your financial history, so it remains separate from your partner's.

If you decide to legally change your name, you will also need to update your name on your Equifax credit report so that your credit history is associated with your new name.

To do this, you can file a dispute with Equifax. Learn how here.

What is a credit score?

A credit score is a prediction of how likely you are to pay your bills on time.

In order to make informed decisions, lenders can use a variety of different credit scores, including those provided by the two Canadian credit bureaus.

Your Equifax credit score is calculated using the information in your Equifax credit file at the time the score is calculated.

The higher your credit score, the more likely you are to qualify for a loan with a lower interest rate.

Will my partner's credit scores affect my credit scores?

Your marital status is not used to calculate credit scores and does not appear on your Equifax credit report.

When you get married, your credit reports and scores remain separate from your spouse's.

In addition, any debt you incurred prior to your marriage will remain in your name.

Before you say "I do," review your credit reports and scores to make sure all the information is correct.

You can view your credit reports and scores on myEquifax.

If you notice a problem with your Equifax credit report, you can submit a consumer credit report update form.

Should we apply for a joint credit account?

If you and your partner apply for a joint credit account, such as a mortgage or car loan, lenders will likely consider both of your credit profiles in addition to the information on your application.

If your partner has a poor credit score or high debt, you are less likely to be approved and may be charged a higher interest rate.

Once opened, joint accounts can appear on both your credit reports.

Therefore, any late or missed payments on these accounts can negatively affect both of your credit scores.

Conversely, any positive credit activity on these accounts can have a positive impact on your scores.

However, you don't necessarily have to apply for joint credit after you get married.

You can apply for a mortgage, car loan or any other credit product individually.

This may be the best option if you have a good credit score but your spouse does not.

When we get married, will our bank accounts become joint?

Your bank accounts will not automatically be combined after you get married.

If you and your partner want to merge your finances, you can apply for loans, credit cards and bank accounts together.

You can also add your partner as an authorized user of your current accounts.

A discussion about your financial priorities and goals may not be the most romantic activity, but it can help get your marriage on the right track.

To avoid serious misunderstandings, it's important to be transparent when it comes to your income and expenses. "

Source Equifax Canada

If you have any questions, please do not hesitate to contact me.